HMRC have the legal right to enquire into any return and if they find that there is an error in that return which has caused tax to be underpaid, they have the power to levy a penalty which is usually based on the tax underpaid. It is these powers that are to change from April 2009.

New penalties

Under the new regime, there will be a presumption that every taxpayer has taken reasonable care in completing their tax return. What constitutes reasonable care will depend on the size of the case – a large company will be expected to have sophisticated accounting systems in place, whilst an individual will be expected to have records of all their income and expenses.

No penalty will arise if it can be shown that the error was due to a simple mistake by the taxpayer. The three levels of behaviour that will give rise to a penalty are defined as:

- careless action;
- deliberate action; and
- deliberate action with concealment.

Level of penalties

The legislation sets a maximum penalty for each type of offence. The rules then allow a certain level of reduction, taking into account only the level of disclosure, but there is a minimum penalty below which the Inspector will not be able to go.

These levels are considerably in excess of the levels which have, historically, been negotiated with HMRC for similar types of offence. It seems inevitable that the cost of making an error is going to increase significantly and the utmost care needs to be taken in keeping records to ensure that they are accurate and complete.

The future

We are expecting HMRC to finalise guidance on these matters in the next few months and we will keep you up to date with developments. We will also let you have details in due course of the other changes that are being introduced, such as powers to obtain information from taxpayers and third parties. In the meantime, if you have any queries about this area, please do not hesitate to contact us.

After April 6th 2009 the statutory dispute resolution procedures will be repealed and at the same time replaced by the new ACAS Code of Practice. Whilst it is easier to understand, it again leaves many areas unexplained. Tribunals will still have the ability to increase or decrease an award by up to 25% where an employee or employer unreasonably fails to follow the code.

Perhaps most significant is the need to take out a grievance before making a tribunal claim, this has been removed so we may simply see claims being made earlier. There are a number of grey areas which we will have to wait for case law to determine.

Overall we will have to wait and see if this new system works better in practice than the dispute resolution procedures but with an increasingly litigious workforce and an uncertain economic climate we may well be changing one set of rules for another.

Employers however should review their procedures to ensure they comply with the code, and we would recommend training for managers on how to handle work place disputes upon which the code places increased emphasis.

• compensatory award: £63,000 to £66,200
• a ‘week’s pay’: £330 to £350
• maximum redundancy payment: £9,900 to £10,500

This Order increases the limits applying to certain awards of employment tribunals, and other amounts payable under employment legislation, as specified in the Schedule to the Order.

Sheila Hudson is a human resources professional providing advice on HR and employment issues for the HR Dept. www.hrdept.co.uk

The latest EU directive on driver safety is still being worked on. The details are not expected to be finalised until 2013. Although some UK newspapers are already warning motorists about having to pay to renew their licence every five years, this scenario is unlikely. However, drivers may have to undergo regular eyesight tests in the future.

Although introducing a driver’s eyesight policy may seem like another chore to add to your business’s to do list, it could have a positive impact on your organisation’s bottom line.

In 2000, the Health and Safety Executive estimated that road accidents cost UK employers about £2.7 billion every year. In addition to excesses paid on claims, employers often had to pay fines, cover the cost of down time, sick pay and replacement staff.

Accidents do happen. However, organisations that have a positive driving for work policy can benefit from an improved safety culture, enhanced public image, a stronger defence against prosecution and civil litigation and lower insurance premiums.

Your driving for work policy does not need to be complicated. It can be incorporated within your existing Health & Safety policy. It should look at management policy, driver safety, vehicle safety and journey planning.

Start by assigning road safety responsibility to a senior manager. Provide a handbook outlining driver responsibilities and your company policy.

Regularly service your fleet to check on equipment safety. This should form part of an ongoing maintenance regime.

Ensure all of your drivers are competent, properly licensed, regularly trained and medically fit. This will include undergoing regular eyesight tests.

It is possible that an EU directive will demand regular eyesight tests of professional drivers in the future. If your business already has a policy covering this, it will not be difficult to adapt to meet future directive requirements.

Sheila Hudson is a human resources professional providing advice on HR and employment issues for the HR Dept.

Yes, the economy is not in the best of shape, but that is good news for you. Why? Because you are going to provide such a good product / service, customers will be flocking to you! Seriously, it is THE time to devote your efforts to more and better marketing, because people are looking for value and benefit for their hard-earned money, and if you can let them know about what you do, they will be interested in what you can offer.

We will be covering a whole lot more on specific areas of marketing in the coming weeks, but seeing it is the first week in January, lets looks at some quick things you can do right now.

What are your objectives this year?
Map out what you and the business want to achieve - don’t make it too easy, and do set some challenging ones. These can be financial, or not, but they should be specific. If you work in an organisation with more than one employee, try making it a collaborative process and get a degree of agreement - it helps enormously with buy in and getting everyone involved.

Revisit your business plan
Hang on, you do have one don’t you? Not all businesses do, and especially not some of the smaller ones. Business plans can be monstrous, heavy documents which take weeks of preparation and are then cast aside to be never looked at again. Please make sure you don’t fall into this trap.

Aim small - be precise and concise. Make sure EVERYONE understands where you are going and where you want to be (look back to the objectives). Don’t be shy to answer the difficult questions and perhaps even try and plan for the unexpected. Just make sure you look at it regularly and do change it of you need to!

Research
This is something you can do if you need to write a business plan. Research and testing are 2 HUGE aspects of marketing which are often forgotten or not even on the radar. If in doubt, any doubt at all, then ask! Do some research and get the answers - it’s easy to do, and we’ll take you through some good ideas in future posts.

Listen
A quick one here. If you do one thing really well this year, listen. Listen to the market, your competitors and your competition. Businesses don’t listen enough. It is very under-valued skill.

Get your paperwork in order and if possible, bin it!
Paperwork can be a mind-numbing, time-killing nightmare. The start of the year gives you a good opportunity to completely change your ‘paperwork’ strategy. If you want my advice, start using the web for a whole load of things you currently use paper for. There are some real advantages of shifting a lot of your business paperwork and processes online, not least for the convenience, and then there is the collaborative nature which can really accelerate your internal processes.

Plan something radical
In 2009, you will need to stand out. Do something radical, something new, something that will be noticed and something that will get people talking. Start thinking now.

If you have any other ideas, then get commenting!

The LIBOR rate is the rate at which the banks lend to each other is related to the cost of mortgages to customers, and we are hoping that this latest fall may result in cheaper borrowing for customers, especially since the recent reduction in the Bank of England base rate had a lesser impact on borrowing costs as some would have hoped.

Those customers on Base Rate Trackers will be very pleased with the rate reductions, and those customers coming out of 2 and 3 year fixed rate mortgages should also be more relieved that the payment shock they were all expecting “should” have been reduced by this action. Fixed rate mortgages currently in place will of course be unaffected, the main obvious reason for a fixed rate mortgage of course!

The Council of Mortgage Lenders have been quoted as saying that that the “Libor was more important in determining the cost of mortgages than the Bank of England’s rate”, so lets see how these rate changes effect the product ranges of mortgage lenders.

HMRC have been reminding taxpayers to complete paper self assessment tax returns by the new deadline of 31 October 2008.  Well that deadline has now passed.  Previously, both paper and online self assessment tax returns had to be filed by 31 January following the end of the tax year. The 31 January 2009 deadline remains for online submission of 2007/08 self assessment tax returns, so if you have missed the deadline for filing your ‘paper’ return, and you dont feel able to submit online, then speak to a good accountant to avoid missing the 31 January else you will incur a penalty.